Winnebago earnings rise despite slowing sales

Courtesy of Winnebago Industries, Inc. Unauthorized use not permitted.

An unexpected production disruption and slow kickoff to the spring buying season dampened Winnebago Industries’ sales for the quarter ended May 25. However, despite a 34.6% decline in revenues for the motorhome segment, Winnebago’s net income edged up 11.2% year over year to $36.2 million.

“Stock market volatility and political uncertainty certainly are weighing on consumers, combined with the potential impact of price increases and rate increases related to some of the new tariffs and/or policies,” Winnebago President and Chief Executive Michael Happe said on a June 19 earnings call. “And while we will not use weather as an overt singular excuse, it is no secret that the spring conditions of 2019 to kick off our selling season, especially in the northern half of the country, were some of the most challenging in recent memory.”

“It appears RV industry retail sales for calendar year 2019 will be down versus last year in the mid-single-digit range, and this will elongate the recovery period for the industry,” Happe predicted.

For Winnebago, motorhome deliveries for the quarter declined 31.3% to 1,962 units. Within the segment, Class A and Class C unit deliveries plunged 47.6% and 30.0%, respectively, as dealers worked to right-size their inventories. An unexpected disruption in chassis supply had a “significant impact” on shipment availability for two of Winnebago’s most popular Class B units, the company said.

“This quarter is a true example of how our new enterprise approach can provide strong consolidated results, even when we incur unexpected external challenges in one of our core businesses,” Happe said on the call, referencing a plan set forth three years ago to become a more profitable and efficiently run organization.

“Beginning in early 2016, we set out on a journey that progresses still today, a concurrent mission to develop a more robust full-line recreational vehicle business using some of the best brands in the North American industry and to initiate or acquire new revenue streams in other adjacent outdoor market spaces that result in an increasingly more balanced portfolio,” Happe said.

One example of that expansion is Winnebago’s luxury boat business, called Chris-Craft, which celebrated its one-year anniversary earlier this month. “While consumer demand within the overall boating market has been a bit inconsistent as of late, interest in the Chris-Craft brand remains strong and we are outpacing our own expectations for this business,” Happe said, adding that most customers in that business pay with cash.

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